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General Letting Question

  • 04-02-2023 4:00pm
    #1
    Registered Users Posts: 899 ✭✭✭


    Hi there,

    Just a quick question around buy to let.

    If you buy an apartment for say 250k. And the rent is 2k a month. Mortgage 1k a month. How much extra tax would you pay out of the remaining 1k each month?



Comments

  • Registered Users Posts: 7,741 ✭✭✭Grumpypants


    You pay tax on the whole 2k. You can't deduct mortgage payments.

    So you would pay roughly 1k a month in tax depending on your other tax liabilities (PAYE etc.)

    So in reality you would prob hand over all the rent and then have to add another 100-400 euro from your pocket to pay the mortgage and cover upkeep.

    Post edited by Grumpypants on


  • Registered Users Posts: 89 ✭✭blarb


    You can deduct the mortgage interest though if you tenancy is registered with RTB. See full list of deductions here:

    https://www.revenue.ie/en/property/rental-income/irish-rental-income/what-expenses-are-allowed.aspx

    You'll probably be taxed at about 50% of whatever is left after deductions if you have other income.



  • Registered Users Posts: 614 ✭✭✭J_1980


    Even after taxes still worth it.

    i have a 2bed2bath Apartment in D4. It’s a goldmine. Easy 2.5k per month.

    irish people don’t buy apartments in general, hence have a discount vs. houses and good yield. They prefer to wait for prices on 3bed semis in Blackrock to drop, so plenty of opportunity to milk these renthogs.



  • Registered Users Posts: 1,064 ✭✭✭DubCount


    I haven't heard anyone describe Irish leveraged residential letting as "easy" in a very long time.

    OP, sorry if this sounds harsh. If you don't know what the tax relief on mortgage payments are, you are unlikely to be up to date with the legal minefield that faces landlords these days. Can you sustain negative cashflow if you get a non-paying tenant, or fulfil all the requirements for HAP (or pay the WRC fines if you discriminate against a HAP recipient), or understand the impact of inflation and interest rate movements on your net yield in a RPZ.

    Do yourself a favour and do 2 things before you invest. 1) Do some detailed research on what is involved in being a landlord these days. 2) Speak to an independent financial advisor to see if this is the best investment option for you.



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